Economic recession is defined as a period of overall economic downturn, high unemployment, a drop in the stock market's value, and a decline in the housing market. A union plays a dominant role in a corporation to obtain a higher salary rate. They negotiate with the owners for a good wage to avoid leaving the job. As a result, labour unions affect market wage rates and assist workers in obtaining a fair salary. When an economic recession occurs, the firms' profit diminishes, and they are unable to meet the firm's expenses. As a result, corporations lay off some employees to reduce their manufacturing costs. In this scenario, the union's bargaining power diminishes since workers understand that if they bargain during this period, the firm will dismiss all workers without any debate. Workers work on the current wage and do not demand a raise because they fear losing their jobs. Workers are also aware that they will be unable to find a new job as quickly as they would want during a recession due to a downturn in the stock market, property market, and so on. Firms are not in a position to hire more people when the economy is in a recession. As a result, during an economic recession, a union's bargaining power diminishes. For example, in Rochester, New York, 300 workers are on strike at the Mott's juice and apple sauce factory. The workers are protesting against the parent corporation, which cut salaries earlier that year. Due to the economic downturn, the corporation hired non-unionized temporary staff at half the cost of the striking workers. Both parties acknowledge that the current situation is not conducive to labour discussions since many unemployed Americans are desperate for work during the recession. In such a case, if workers are aware that the corporation can hire people at a lower wage, existing workers do not fight for a wage increase owing to job loss. 

This demonstrates that economic recession reduces union bargaining leverage. The labour relations process focuses on collaboratively agreed and administered work rules concerning compensation and employees' and employers' rights and obligations. The labour relations process is adaptable enough to allow agreed work rules to change in response to unique characteristics of a specific industry, job classification, geographic context, or external environmental variables. Because the labour relations process is dynamic, bargaining arrangements can adjust to changing competitive situations. Domestic nonunion competition undermines union bargaining power during the recession. Many union members are lost during this time. In order to combat membership loss, unions grant wage and benefit cuts. In several cases, their compromises appeared to reduce the loss of members. However, in other cases, union concessions were insufficient to counter the opposing pressures of the marketplace, and union membership continued to diminish during the crisis.

 

Question:

What steps can a Union taketo reduce the effects of a recession on their bargaining position?

Answer rating: 100% (QA)

To mitigate the effects of a recession on their bargaining position a union can take several strategic steps Diversification of Membership Expand memb... View the full answer